Keep Or Sell Your Mascot Unit When You Upgrade? A One‑Week Decision

Upgrading from a Mascot apartment to a bigger home raises a hard question: should you keep your old unit as an investment, or sell and go in clean?

The decision comes down to cashflow, risk and structure. As a rule of thumb, keeping your Mascot unit only makes sense if (1) total home + investment repayments stay under about 35% of your after‑tax income when stress‑tested 2–3% above today’s rates and (2) you still have 6–12 months of living expenses in buffers. Everything else is detail.

This guide walks you through a simple five‑number framework so you can decide calmly within a week whether “keep and rent” is right for you.

Start with clear numbers on your current Mascot unit and future home.

1. The real question: are you building a safe two‑property plan?

Keeping your Mascot unit when you upgrade is not just a property decision; it’s a whole‑household balance sheet decision.

You are effectively choosing to:

1. Run two mortgages in a postcode that lenders already treat cautiously (high‑density, flight path, mixed stock), and
2. Accept more leverage in return for potential long‑term growth and rental income.

For most inner‑south Sydney upgraders, this only works when three conditions are met (similar to what we see in Green Square upgraders):

• Repayments test: Total repayments on your new home loan plus the Mascot investment loan stay below ~35% of your after‑tax income when stressed 2–3% above today’s rates (APRA currently expects at least a 3% serviceability buffer).
• Buffer test: You still hold at least 6–12 months of living expenses in offset/accounts after settlement.
• Portfolio test: The Mascot unit is likely to be at least neutrally geared or only modestly negative on a pre‑tax basis post‑2027.

If any of those fail, keeping the unit usually becomes more emotional than rational.

2. Your five key numbers: decide within a week

We’ll use the same five‑number framework we use for Dover Heights clients, adapted for Mascot (/insights/keep-old-home-investment-upgrade-dover-heights):

1. Usable equity in your Mascot unit
2. Deposit gap for the new home
3. Safe total repayment level (home + investment)
4. Realistic net rent on your Mascot apartment
5. Post‑move cash buffer

2.1 Step 1 – Usable equity in your Mascot unit

Work out what your unit is actually worth today and how much you owe.

• Indicative value: Use recent comparable sales, then shave 5–10% as a safety margin, especially if your building is high‑rise or has cladding/strata risk.
• Current loan balance: Check your latest statement or internet banking.

Lenders will usually cap investment lending around 80% of value (higher LVRs are possible, but LMI on an investment plus postcode shading can get ugly).

Example

• Mascot unit conservative value: $800,000
• 80% of value: $640,000
• Current loan: $520,000
• Usable equity (on paper): $640,000 − $520,000 = $120,000

This is the maximum you can usually gear against the unit without LMI. In practice, we’ll often use less to keep buffers healthy.

2.2 Step 2 – Deposit gap for the new home

Next, estimate the price of the house or bigger unit you’re targeting and how much cash or equity you need.

As a rough guide for Mascot upgraders:

• Aim for 20% deposit + 5% costs (stamp duty, legal, inspections, moving) = 25% of purchase price.

Example

• Target family home: $1.5m
• 25% deposit + costs: $375,000

Now compare: do your savings + usable equity cover this comfortably, or are you stretching?

If you need almost all the usable equity from the Mascot unit just to make the upgrade feasible, keeping it as an investment may push you too close to the edge.

2.3 Step 3 – Safe total repayment level

This is where a lot of well‑paid Mascot professionals over‑stretch.

From our work across the Eastern Suburbs and inner south, a safe range for upgraders is:

• Total repayments (home + investment) at today’s rates: no more than 30–32% of after‑tax household income.
• Stress‑tested at +3% interest rate: still no more than about 35% of after‑tax income.

This aligns with APRA’s 3% buffer and our experience across similar clients (/insights/mascot-apartment-to-family-home-safe-borrowing).

Example (same buyers):

• Combined after‑tax income: $15,000 per month
• Safe stressed repayments (35%): $5,250 per month

We’ll use that figure again shortly.

2.4 Step 4 – Realistic net rent on your Mascot unit

Don’t use the highest rent you see on realestate.com.au. Use a conservative, realistic number.

1. Estimate market rent. Talk to two local agents or use recent listings, then discount by 5–10%.
2. Subtract ongoing costs:
   • Strata
   • Council + water
   • Landlord insurance
   • Property management (if using an agent)
   • Allowance for vacancies and routine repairs

Example

• Gross rent: $800 per week (~$3,470 per month)
• Less: strata $900, council/water $200, insurance $70, management $280, maintenance/vacancy allowance $250
• Net rent (before interest): $3,470 − $1,700 ≈ $1,770 per month

You will compare this to the Mascot investment loan repayments shortly.

2.5 Step 5 – Post‑move cash buffer

After both properties settle and you’ve furnished the new place, how many months of core living expenses will you have in offset or cash?

For a two‑property household, you want at least 6 months, and 12 is far more comfortable.

If your buffer drops below 3–4 months in the keep‑Mascot scenario, that’s a major red flag.